The "money talk": How to raise financially savvy kids.

Wouldn't it be great if talking to your kids about money was as easy as this: "Hey Mom/Dad. Can I have some money?" "No." "Okay, you know best."

We all know how likely that scenario is. But talking about money is much more than doling out the dollars when you hear a "But I neeeeeeed this." Money-talk needs to happen early, and probably often.

Here are a few ideas that may help you start your child off on the road to being a financially responsible adult.

"Money doesn't grow on trees."

You probably heard that saying from your parents. Granted, there are some wiseacres who may have responded with, "No, paper money comes from flax, a plant." But the point is that young children need to learn that money doesn't come easy. (And that it also isn't magically made in an ATM.)

It's never too early to help your child develop a healthy respect for money and good financial habits. An allowance can be worthwhile if it does the right things. If your objective is to teach the basics, consider the following:

• Set a weekly allowance. Some people set an amount to match the age of the child - a 5-year-old gets $5, for instance. The amount is up to you, of course.
• Tie the allowance to chores like setting the table for dinner.
• Divide the allowance into different spending categories - 1/3 for immediate spending, 1/3 saved for some specific near-term purchase (like a small new toy) and 1/3 for a longer-term goal (like a major new toy). You may want to divide it even further, and set aside some for charitable giving.

The teenage years

This is often the most difficult time for children to deal with financial issues. Peer pressures, a desire to have what friends have, and the growing realization that they can't have and do everything they want can add tension to any conversation about finances. It's also the time when children can start understanding more complex financial issues and when financial habits are formed.

The allowance approach gets more complicated in the teenage years as the costs of items they want goes up, and they're doing more things that cost money. Now could be the time to discuss how a job could help them afford the things they want. After-school and summer jobs are an ideal way for teenagers to learn that money is earned, and not something that mom or dad will always provide. A job can also teach them about responsibility, since their employer will be relying on them to be present and punctual. If an outside job isn't possible, consider paying them an hourly rate for more chores, and insist they treat the chores as a job.

Helping your teenager establish a checking account, or even preparing a tax return, will go a long way to helping them understand that money is a serious matter and that someday they'll need to be self-sufficient and make their own financial decisions. If they get a checking account, be sure you teach them how it works and how to reconcile their account every month.

Keep the conversation going

Be open to discussing finances with your children. Children are naturally curious about what they see their parents doing, and you can turn that curiosity into teaching opportunities. The conversations must certainly be age appropriate, but when your child sees you writing checks, start talking about the importance of paying bills and balancing your budget. When you're shopping, point out things that are on sale and the benefits of waiting for sales to buy certain things. And a discussion about choosing a college can be an eye-opening experience when your child learns what it costs.

Take advantage of these opportunities and by the time your child is ready to leave home, they will have a foundation to better prepare them for their financial future.